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Elizabeth Wolf

One of the most shocking elements of this article, in conjunction with the textbook reading, is the influence that culture plays in keeping our world’s poor very poor. The data suggests that consuming the highest level of sustenance is not the poor’s first priority. “Perhaps more surprising, it is apparent that spending on festivals is an important part of the budget for many extremely poor households” (5). The data also shows that as income increases, so does consumption of more expensive grains and sugars. This, from a caloric standpoint, is inefficient because an increase in income could buy more nutritious food rather than more luxury items. The immediate question is: if you don’t have enough to eat, why would you spend money on parties and luxury items?

But if efficiency is defined as maximum utility, and the individual gets more utility from a unit of sugar or a radio than an additional unit of nutritious grain, then isn’t the decision economically efficient?

However, cultural decisions often dictate utility often at the expense of enough food, land, health care, education, material goods, even productive assets for their businesses. Lack of proper banking structures and court systems prohibits efficient lending practices that slow growth. They lack the tools needed to make the most economically efficient decision the highest in individual utility.

As we’re learning, the factors that go in to making as society poor are numerous and complicated, but the balance between what is cultural (i.e. what is determined as useful) and what is structural (i.e. the lack of ways to save money), and their relation to one another is complicated but interesting. This article does a good job of highlighting the poor’s behaviors that keep them poor but also explains why it would be difficult for one individual to break away from their cultural reality, as the community is often the only thing standing in the way between poor individuals and death and often the task of crawling out of poverty is harder than just getting by. It’s a disturbing set of decisions to be made, but the manner in which they are made and what the world’s poor spends their limited resources on also gives pause for thought.

Cara Hayes

“The Economic Lives of the Poor” gave a really thought-provoking insight into the everyday decisions those living in poverty have to make. I am currently in Demographics and Development in South Asia and it was interesting to read this article through that lens. Banerjee and Duflo specifically examine Udaipur, one of the poorest districts in India where 47% of people surveyed live on under $1 per day and 86% live on under $2. The tendencies of the people of Udaipur provide many insights into the lives of the poor. For examples, 99% of people surveyed in the Indian city had spent money on a wedding, funeral or religious festival in the past year. Banerjee and Duflo found that the typical poor household in Udaipur could spend up to 30% more on food than it actually does, if it spent less on alcohol, tobacco and festivals. From this, they conclude that the poor do not appear to be as hungry as one might expect and do not always choose to spend all their income on food.

In my other class, we also read an article by Banerjee this week which examined the impact of colonial land revenue institutions in India that were established during the British occupation. “History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India” compliments “The Economic Lives of the Poor” by adding an additional explanation to the fate of the poor: history. Banerjee comes to the conclusion that when property rights to areas of land in India were given to landlords by the British instead of the cultivators themselves, those areas experience significantly lower agricultural investments and productivity as well as less investment in education and health. While limited access to credit and labor markets are definitely major contributors to poverty, it would be very interesting to examine the economic history of Udaipur and see how its historic land tenure systems affected the extreme level of poverty in the city today and the tendencies of the poor there. From reading the two articles, I would infer that a landlord system would be connected to areas of poverty today because of the stifled levels of investment in health and education over the past generations. Additionally, I think it would be interesting to explore the tendencies of the poor in other countries in Banerjee and Duflo’s survey and see how they are affected by the historic property rights laws in their region.


As a business journalism major, I have spent the last three years fixated on how people gather and receive information and how that information informs their lives. In reading Banerjee and Duflo’s The Economic Lives of the Poor, I was struck by the lack of information access afforded to the very poor, particularly in their primary education. In their lack of access to quality education, the poor and very poor are at a disadvantage in workplace competitiveness, personal freedoms and general wellbeing. This disadvantage can be solved through basic tenets of development economics, though. By means of improved education policy, poor and very poor children could face better prospects later in life and family units could spend less of their income in the attempt to attain quality education for their children. I propose policies in poor countries to improve basic financial skills of young children by teaching useable math and very basic economics, smart decision making and improved awareness of nutritional needs.

A family in Udaipur could spend up to 30 percent more on food than it already does (6). 99 percent of the very poor still own land (7). But very few rely on savings accounts in reliable or commercial banks from which they could earn interest. Evidence shows the poor and very poor have some degree of freedom of choice in their economic decisions, but I believe there is more to gain from this freedom. Buying healthy food instead of spending money on festivals could mean parents won’t go without a meal – a simple phenomenon that will result in healthier parents and lower levels of unhappiness (9). Investing saved money in banks or other ventures could promise returns down the road. Using owned land smarter and implementing rentals could increase family income. When a child knows to buy a healthier and more economic food choice over a processed and more expensive one, he is better prepared to arm his own family with knowledge that might aid in breaking through the poverty line.

These useful choices could be rooted in simple lesson plans reinforced from a young age in more efficient public schools. Parents could react and pressure the government, as the authors propose (21). This could become cyclical – the issue at present has much to do with the poor education of children’s parents. If these children receive good educations, they will be better positioned to recognize if their own child is being neglected in public school. By knowing their options, children will experience greater economic freedom. Lesson plans could include the basics of banking, including money-saving tactics and interest rate manipulation; smart nutrition choices and how to find advantages in the food market – and even the groundwork for future careers. In the dosa example provided by the authors, the woman appears unaware of the competitive advantage she could gain by pairing with another woman on her street. If she had received basic economics lessons in primary school, she might recognize this opportunity and improve her own status.

Families might not spend very much on education at present, but the current return on that investment is incredibly low. For the same amount of their income and with the aforementioned policy changes, families could realize incredible gains down the road in order to become more informed, more competitive and, theoretically, less poor.


As I was reading “The Economic Lives of the Poor,” I seemed to subconsciously divide the challenges faced by those beneath the poverty line into two categories: challenges that are products of systems that are so inherently flawed that it doesn’t appear feasible to tackle them head-on in the near future; and challenges that, while perhaps equally as detrimental, might be fixed a little more easily. Indeed, I think that fixing just a couple of the easier problems would make the others more manageable. With this in mind, I was very much struck by the conclusion posited in the final paragraph that a large incendiary for under-achievement in earning money is a psychological one—a reluctance to acknowledge how truly inadequate the standard of living is. If this is the case, then what is needed for these people living off less than $1 or $2 a day is a paradigm shift, a way of altering their incentives so that they become more motivated to earn money. I don’t think anyone can blame the impoverished for not making the “best” use of their income when buying alcohol, tobacco, etc: I, and I’m sure others, frequently find myself spending money inefficiently or on trivial, fleeting pleasures—it is human nature to discount long-term time scales in decision making. What it seems we can do, however, is encourage the indigent to want to rise above their circumstances through more secure banking and insurance systems, and programs that can help them incubate their potential. We can also find ways to provide loans to ambitious entrepreneurs who otherwise lack the means to raise capital. This will lead to increased specialization and a snowballing of other economic benefits. Although this study noted a myriad of systemic issues in developing countries, I feel as though my aforementioned suggestions would be easy places to start getting things fixed.

Matthew Jones

"The Economic Lives of the Poor" illuminates the significant problems the poor and extreme poor face, and while some of these problems are complicated, they still have solutions. Amartya Sen discusses in our textbook the importance of being healthy in terms of escaping poverty, yet a majority of the people studied by the authors have poor eating and poor nutrition habits. Coupled with the fact that most impoverished people then get a lackluster education, they probably do not truly comprehend the importance of being a healthy person. As a whole, Banerjee and Duflo found that the poor are malnourished, partially because of spending habits. The fact that a lot spend more on inefficient calories by purchasing products like tobacco and alcohol instead of efficient and nutritious calories reveals a lack of education to me. Even though malnourishment does not appear to be a leading concern from the impoverished people themselves, it affects their well-being. Perhaps by educating the poor how to better fuel themselves, we could create a more productive impoverished people. The authors revealed how government run public schools often provide an inadequate education. However, by better educating our poor as children on nutrition and health habits could we potentially improve their overall well-being, and fuel more output, thus increasing their chance to escape from the chain of poverty they are be stuck in? I believe so. In all the problems the poor face in their lives, the overall lack of knowledge and not knowing how to spend their money properly seems to be the overarching reason as to why they remain unhealthy and unable to escape poverty. By helping governments reform their education and healthcare systems in a manner that would help to teach the poor more how about improving their overall health, the potential to positively influence the cycle of poverty exists.

David Cohen

One anecdote which interested me in “The Economic Lives of the Poor,” was the story of the dosa women in the Udaipur. These women sell the rice-bean pancakes in the morning, while earning income through multiple other means throughout the rest of the day. Though these women, when interviewed, explained that they could not cook dosas for the whole day, a part of me wondered, why not?

Banerjee and Duflo go on to explain that a full-time entrepreneurial endeavor would require more startup capital than is readily available to the extremely poor. It would seem that multiple smaller jobs with little to no barriers to entry are more feasible.

What was especially interesting, however, was why even rural communities of the extremely poor also largely experienced multiple occupations. Is it less advantageous to grow and sell food, even locally, if you are a small farmer? Banerjee and Duflo cited many of these extremely poor as owning up to multiple hectares of land (which could grow a decent amount of food). The article highlighted several areas of rural India (with largely generous farming conditions), where families do not get the majority of their income from agriculture. South Africa remains the outlier regarding multiple jobs, as the extremely poor in both urban and rural areas almost entirely report having one job. Is there a cultural or economic condition that allows for this?

Conventional wisdom would suggest that additional economic opportunities would be much more numerous and profitable in urban areas than rural ones. The article supports this idea, citing the Udaipur survey which revealed that 60 percent of the poorest households in this region sent a migrant into the city part of the year for work. If all this is true, why isn’t there a more permanent, largescale migration of the extremely poor into nearby cities? Additionally, why hasn’t this trend been identified in more of the surveyed countries? The idea of remaining connected with social groups isn’t really convincing for me. After all, if communities move together, this eliminates the heartbreak of many months away from loved ones. Early in the article, it was explained that large numbers of people lived together to decrease expenses on the fixed costs of living, like housing. If this is true, why can’t larger groups of people migrate to the city together, where economic opportunity seems to be more promising for all? That being said, I do understand that this transition might be harder for families in Mexico or South Africa that live further in distance from urban areas. Regardless, the idea that people, like the Kenyan farmers who wouldn’t buy fertilizer (even though they were capable) at risk of “committ[ing] themselves psychologically to a project of making more money”, would not make an adjustment to benefit their family’s well-being still confuses me.

Pearce Embrey

Last winter term, I took Professor Blunch's course on Health Economics in Developing Countries. Throughout the course, the class analyzed various health-related issues in these developing countries and attempted to determine the best courses of action to alleviate these issues. While reading Banerjee and Duflo's "The Economic Lives of the Poor," the first thing that caught my attention was the incredibly low literacy rate of women in the Indian city of Udaipur- roughly five percent in 1991 (2). Continuing through the article, Banerjee and Duflo describe a variety of different health issues in the countries they surveyed. In Udaipur, they mentioned the prevalence of diarrhea in children. According to Blunch's class, the issue of diarrhea in children is directly correlated to the low literacy rate of women, overall, in the area. I believe that a way to fix a large number of health issues in these poor countries is to provide adult literacy programs for women, especially mothers. If a mother is more literate, then she will be better able to take care of her children if they are sick.

Jillian Leigh

While reading "The Economic Lives of the Poor" I thought a lot about how the media portrays these developing countries. As a photography minor I've studied many photographers who travel the world and document how the poor live, such as Walker Evans. The focus of many of these photographers is to capture the poor living conditions and make their subjects look malnourished. While reading this article I pictured many of these images I've studied and realized that although these subjects were starving they might not be as miserable as the photographers portrayed them. This article brought up and interesting point that, "the poor generally do not complain about their health - but then they also do not complain about life in general either. While the poor certainly feel poor, their levels of self-reported happiness are not particularly low." These photographers did not capture the poor's social gatherings, weddings, or festivals. They only focused on the negative aspects of their lives. It made me question whether these images were helping or hurting the world's view of the poor in developing countries. These people are lacking more than just nutritious food. The definition of a 'poor' person needs to be updated from "someone without enough to eat." I think that if we update how the world views these developing countries there might be a greater impact on how they are helped. There were many topics discussed in "The Economic Lives of the Poor" that never reach the media. Also, we cannot assume that every developing country needs the same things. Looking at recent images of developing countries they all seem very similar. Meanwhile this article is about how although they are developing countries, not one of them are facing the same issues as the next. For example, the availability varies drastically between countries. For example in Udaipur none of the poor have access to running water while 36 percent of the poor in Guatemala do. I think these differences need to be broadcasted and the photojournalists who document the lives of people in developing countries need to broaden their subject matter as well.

Matthew Sgro

"The Economic Lives of the Poor" gave me further insight into the poverty stricken lives of many humans around the world - a topic I know very little about and can hardly begin to relate to coming from a middle class family in the U.S. Therefore, the fact that these people are still spending some of their limited income in items such as alcohol, tobacco, and large social gatherings (such as festivals and weddings) was astonishing to me. For example "The typical poor household in Udaipur could spend up to 30 percent more on
food than it actually does, just based on what it spends on alcohol, tobacco, and festivals." At first this simply doesn't make sense, these poor and extremely poor people are starving, yet they are not using more of their money to help solve this problem. The article then goes on to further illustrate their dire situations highlighting low BMI's and that only fractions of the poor in many countries own assets such as a chair or table. However, after relating it to other courses I have taken at W&L in Sociology and Psychology I realized these are still human beings; creatures who for the most part strive for social connections. The alchohol, tobacco, and festivals provide this social construct - maybe allowing them to distance themselves from their impoverished lifestyles even for just a short time. As Matthew Leibermann, a professor of psychology in the UCLA's Semel Institute for Neuroscience and Human Behavior states, "Being socially connected is our brain's lifelong passion". Therefore, like any being these poverty stricken people experience a fundamental human need to be social and connect with others - however their opportunity cost of buying alcohol, cigarettes, etc. is much much greater than ours.

Matt Parker

While reading "The Economic Lives of the Poor," two things really stuck out to me. The first thing that stuck out to me was the misconception that the poor use or even have to use every penny to obtain more calories from food. Things such as festivals, radios, and bicycles also used a portion of the poor's budget. While this seems like a misuse of their limited funds, are we in a position to critique how they derive their enjoyment? Or as Elizabeth pointed out in her comments, maybe they are maximizing their utility and therefore allocating funds efficiently. It was interesting to note that even though the poor are aware of their poverty, they don't have lower levels of happiness relative to their economic status. I also wonder if the more sugary,salty foods are easier to obtain (such as fast food here) and thus are more easily consumed since the poor in this survey often work multiple jobs.

The other thing that stood out while reading this article was the necessity of sound infrastructure. As we talked about in class, there was a study in 2003 that basically determined an unending cycle between health and income existed. In this cycle, poor adults have kids who are sick and those sick kids are unable to go to school, perform physical tasks and they grow up then to be poor adults who give birth to a new generation and thus the cycle continues. Infrastructure seems to be at the heart of this, where inadequate tap water, access to electricity, roads, etc can all have a devastating effect on a child's learning and ability to stay healthy. This is particularly true in the case that Pierce pointed out, where he found there was a strong positive correlation between children's diarrhea and women's literacy rate. One way to break that cycle is addressing the health aspect which will invariably lead to better class attendance, healthier kids, and thus literate adults to hopefully break this seemingly endless cycle.

Julia Mayol

When I first read the article it amazed me how people living with less than $1 per day could spend their money in things other than food. One would think that $1 is not even enough to buy food for a day. However, after reading the article and thinking about it, I realized that the extremely poor people’s behavior in spending their money was what I had noticed when talking with poor people back home, in Argentina. The fact that in Mexico, in extremely poor rural areas people spend 8.1% of their budget in alcohol and tobacco did not surprise me. Both the article and what I have seen and experienced in the different developing countries, showed me how poor people tend to live their daily lives without thinking about their economic future, but rather trying to enjoy the present. It might seem shocking that people living with less than $1 per day can spend part of their budget in festivals; however, I have seen extremely poor people selling things from their houses and not being able to afford electricity, while spending the little money they have in 15th birthday parties for their daughters.
Moreover, it surprised me how poor people’s levels of self reported happiness are not particularly low. This maybe due to the fact that, as I mentioned before, poor people tend to enjoy each day, choosing to spend the money not only in food but also in things such as radios, televisions or even festivals, which make them happy.
It seems to me that one of poor people’s greatest weaknesses is the lack of education. “[…] only about two-thirds of the total spending on grains is on these grains, while another 20 percent is on rice, which costs more than twice as much per calorie, and a further 10 percent or so is spent on wheat, which is a 70 percent more expensive way to get calories.” I think this is a great example of how lack of education affects them in every aspect. Lack of knowledge in different things, such as nutrition, makes poor people spend money in a less efficient way. The former is due to the fact that “The expenditure on education generally hovers around 2 percent of household budgets,” the reason for this being that, as Banerjje and Dulfoo explain, young people attend public schools. This would not be a problem if these schools were good; however, as the paper says they are often “dysfunctional.” It is crazy to think that people in Indonesia spend the same percentage of their budget in alcohol and tobacco as they do in education. This lack of education is then reflected in the type of jobs people get after graduating school. Therefore, I think education is one of the pillars for progress, and after reading the articles, I can see it as one of the main steps that need to be taken among poor people in order to improve their lives’ quality.

Andy Kleinlein

“The Economic Lives of the Poor” gave a new meaning of poverty to me. Previously, I had not taken a class in poverty or economics that dove into these issues. From my personal experience, I did have a worldly view of poverty. While I had seen commercials to donate money and heard how poor people were, it was put into perspective when this paper only covered people living on less than $2 per day. I previously viewed poverty as someone making less than $20,000 in the United States.

As others have stated above, the thing that stood out to me the most is that these people are more similar to us than not. Entertainment, such as festivals, television, and radio are still important in their lives. With such little money, they still find it important to find “releases” through alcohol, tobacco and drugs. While a lack of food contributes to unhappiness, they do not find it as important as other things. Even though I have the opportunity to have food pretty much whenever I want it, I can see where these people are coming from. It was good to see that they do not appear so desperate that they are not enjoying the better things in life such as friendship and family. As a society, we have become fixated with many other things such as food and work, while the impoverished do not feel these pressures. I also found it interesting that they live in large numbers. While it does seem to be a money-saving tactic, it also shows that the place an importance on family and staying together. There is plenty for us to do to help them better their lives, I found it interesting that we could pick out things in their lives to potentially better our own.

Ella Rose

I found this articles very interesting. Benerjee and Duflo brought up many relevant topics and supported all of their claims with sufficient data. They covered a wide range of topics that really helped the reader understand the plethora of obstacles facing the extremely poor in today's world. It was tough to read at some points, because just when you thought that could be the last problem, there was another entire section of obstacles to face. After reading this, the situation seems pretty desolate. In every corner that "development" would like to reach, there are ten things that prevent change from occurring. From trying to gain access to loans, to knowing how to budget income, to getting good advice from a doctor, it seems like nothing is going their way. I can only imagine how incredibly frustrating this type of lifestyle would be, and it seems very unjust that it should still exist in today's world.
However, the one positive thing I took away from this article was about the food budget. The authors seemed very disturbed by the extremely poor's lack of spending on food. They discussed it at the beginning, and then came up with some relatively unlikely solutions to why this might be happening. I saw this in a different way. I think that is is remarkable that even in such a tough economic situation, the poor are still able to prioritize connection about everything else. They are still able to have a strong hold on what makes us human (that being our desire to connect with people) and they value that equally to nourishing their own bodies. The authors called this "entertainment" but really, I think its mental and spiritual food that is so necessary for people, especially in such a stressful lifestyle. I even think Sen would commend them for choosing to spend this money on things like radios and festivals that connect them to other people.

Ololade Rachel Oguntola

Banerjee and Duflo do a good job of explaining why the poor seem to remain poor and why the circle of poverty seems to be unending among the poor and the extremely poor. Having taken Pickett’s class my freshman year, it was good to have another read on the “economic lives of the poor”. However, while the statistics are pretty helpful in comparing the poor among countries and making sense of the variations, I feel many of the reasons why the poor are still caught up in that circle should not seem too surprising. There is certainly more to life than food and while the poor are supposedly starving, they also understand that fact very much. It might seem contradictory that they spend their money on things such as alcohol or entertainment or even more expensive food products like sugar etc., when they could be using it to eat at least twice a day or more. Take the example of the Udaipur poor that spend a huge part of their earnings on festivals. Festivals and weddings in India are a huge part of their culture and helps them achieve a sense of belonging within the community. The mere fact that they spend on celebrating or engaging in these festivals show that they too value choice and deem self-esteem to be important to their livelihood aside from food. Coming from a developing country myself, I have witnessed what poverty is and seen poverty firsthand and as such, I’m not quick to judge how the poor decide to spend their money even though outsiders viewing from a distant lens can be quick to say the poor do not know what to do with the little they have. I believe to truly understand the poor, such surveys and immersions into the livelihoods of the poor is crucial.
One other thing to point out is the health and wealth circle we talked in class that was also pointed out in this paper. In my own opinion, I still believe that wealth comes first. Although, income is not the most important factor, it still is a crucial one. Indeed, the argument has been made that once there is good health, there are healthier bodies to work more productively. However, think of a poor family living under $1 a day and health is quite possibly the last thing on their minds (and can be seen even in their consumption of less calories needed and spending a sizeable portion of earnings on commodities other than food). Now, I believe if that family starts seeing a sizeable and sustainable increase in income, it automatically makes sense that they will invest in their health (because they now have a better means of doing so) as well as other things e.g. education. This is not to say that health is not important, but it is my belief that wealth considerably influences good health first and foremost and to break that circle, we must better address the income part.

Allie Barry

While reading "The Economic Lives of the Poor", I couldn’t help but draw many comparisons to another one of Benerjee’s papers I read this week for my Development and Demographics in South Asia Class. As Cara discussed above, one of the main conclusions this other paper came to was that regions in which investment in health and education was stifled in the past, experienced lower levels of productivity going forward. This concept seemed to ring true throughout "The Economic Lives of the Poor" as well. While the authors say that many developing areas do have health centers and primary schools for education, it is clear that these areas are not likely to experience the benefits as they are poor quality. I found it appalling to hear that according to one study the treatments suggested by an average provider are more likely to do harm than good. This emphasizes the extreme need for more investment in health and education services so that the developing countries can in fact benefit from these services. Drawing on a paper I read in Professor Blunch’s healthcare economics class, if a mother had math skills (which are taught in school) this had a significant positive effect on their health knowledge. This just goes to show that investing in education will also help to improve healthcare outcomes in the area. "The Economic Lives of the Poor" goes on to discuss the plethora of other decisions that the poor face such as living arrangements, the food they choose to consume, what kinds of assets they buy, how they earn their money, their lack of access to credit, however based on the evidence in this paper along with previous papers conclusions, it seems to me that investing in health and education infrastructure could be the best starting point for improving the quality of life for the poor. By focusing on these sectors first, the poor would be better prepared to make many of the other tough decisions that the authors bring up in this paper.

Michael Hegar

"The Economic Lives of the Poor" shows that there is more to poverty than just money. I found it really interesting how closely related many things are to poverty. Normally I would not associate being poor or extremely poor with education, but as "The Economic Lives of the Poor" points out, poor families in other countries may have to decide between sending their kids to school or to work for extra income. Parents have to sacrifice their kids' potential to have a better future so that the whole family can eat today. This creates a cycle in which the poor remain poor because they have to work at a young age instead of learn.

Another thing in this essay that I hadn't thought about before was the fact that impoverished people might only move temporarily for work. I have heard about poor people moving so they can send money back home or even commuting over long distances for each day. It makes sense from a social point of view why the poor do not migrate for longer periods of time. Moving sucks and moving to a different region or country is even harder. The poor forgo the opportunity cost of getting paid more because being close to their social circle, community, and family is more important to them. The following bit from the essay says a lot about the values of the poor and extremely poor: "The ultimate reason seems to be that making more money is not a huge priority, or at least not a large enough priority to experience several months of living alone and often sleeping on the ground somewhere in or around the work premises." It comes down to priorities. The poor have to make choices about how much to eat, their kids education, where the work, and whether or not they save. These are not easy choices to make.


First and foremost, I find it surprising that on average, those living on about $1 a day spend only $0.50 on food. With such little money I assumed that food would take up almost the entirety of their budget. I also find it surprising that poor people spend money on weddings, festivities, and religious ceremonies. This suggests to me that one’s social standards or culture plays an important part in one’s financial decisions. Apart from this, it shows how everyone has similar basic needs, despite one’s income. Regardless of their income, poor people still find the time and money to participate in social events and stay connected with friends and family. Furthermore a small portion of the $1 a day is spent on tobacco or alcohol which could suggest addiction, a need for release, or simply the social aspect of using those substances. And still this aspect of life is not different from a wealthy person. With this in mind, it goes to show that food is not the sole priority of one living in absolute poverty, and that there is more to be gained in other aspects of life rather than being able to sleep with a somewhat full stomach.

Jack Miller

Alex Shields

"The Economic Lives of the Poor" capably introduced readers to the many struggles for the extreme poor in developing countries by focusing on many aspects of their life such as their personal expenses, employment, economic environment and infrastructure. I found the section that focused on the economic environment for the extreme poor to be most interesting because it provided insight into the lack of opportunities the poor have for financial help. Particularly focusing on loans, poor people primarily do not have access to safe loans from commercial banks, instead having to rely primarily on loans from moneylenders, or family and friends. High interest rates due to instability and the lack of trustworthiness in the loan markets make loans dangerous to the poor. One potential solution to helping the extreme poor in impoverished nations is to offer safe and trustworthy loan opportunities so that they can improve their employment opportunities which in the long run will help to improve the entire economic system around them. I found it interesting that the article did not touch on the idea of inflation and deflation and how it impacts the loan markets in these countries. The majority of poor nations do not have the stability and predictability that can be found in the United States adding another wrench into any poor person’s plan to take out a loan.

Another interesting topic brought up in this section is government programs that allow people to work in exchange for food. I think these government programs are a step in the right direction for developing nations because they allow the poor to receive food in exchange for public improvements to the country. Obviously, all the members of the family would not be able to participate in this program as a family needs money to put towards other parts of the budget, but if one member of a family were able to work in a program such as this, they could provide the food for the family while the other members of the family would provide the money for the remainder of the budget.


After reading "The Economic Lives of the Poor" my view of the day-to-day struggle that the extremely poor have to face changed. Before reading the article I believed that people who live on 1 or 2 dollars a day lived an extremely monotonous day. A day that was pretty much decided by how much they could spend on food and shelter and that they had little control on what they could change. But after reading the article it made me realize they actually have an almost painful amount of choices that they have to make each day that can really add up, in either a good or bad way (usually bad). Essentially the environment that the extremely poor live in ultimately decides what economic choices that they have by constraining them to a list of often questionable options. But within these constraints, we still see many of the things that we see in our lives including saving for goals, spending on social events and entertainment, moving for jobs and opportunities, and investing. The article made me realize that no matter our wealth or position in life we all are tasked with similar choices, only certain people might have less variety due to the environment that they live in.

Crosby Ellinger

"The Economic Lives of the Poor" was a very interesting read, as it pointed out many areas of concern for those living in “poverty”, as well as some interesting and perplexing statistics that contradict certain assumptions that one might make of poor people and how they spend their money.
For instance, I have some background in poverty and have learned that nutrition levels are often low for poor people, as they are not as educated on health and nutrition and often spend their money on food that is unhealthy, as the paper points out. However, I found it quite interesting to learn that in some countries, food represents only 56% of spending among the poor, while products such as tobacco and alcohol can make up as much as 8% of spending.
Furthermore, another point that this article raised that I found intriguing had to do with how the poor earn their money. I found it interesting that many poor people tended to work as entrepreneurs, selling food and goods on the street, such as dosas and saris in India, instead of working conventional, low-skilled low wage jobs. One might assume that impoverished people would work low-paying, less skilled jobs and barely get by, but I found it fascinating that many of the poor people in these countries were actually being very creative in how they made money, working several different jobs, and finding certain niches to earn money.

Tony Du

Reading Banerjee and Duflo's account of the dofa sellers reminded me of the merchants that litter the streets of poor rural communities in China. My extended family lives in the Sichuan Province of China, and whenever we visit I am always bewildered by the amount of jobs the impoverished juggle in order to make ends meet.

I remember meeting one of my Grandma's close friends in particular. In the mornings, she made noodles and dim sum, selling breakfast foods at her street stand. In the afternoons, she would pick up trash on the streets. At night, she would sell fruits at her stand. The most amazing part was that she was 73 years old and still had the energy to work all day.

This juggling of jobs is incredibly common in rural areas of China. Banerjee and Duflo hit the nail on the head when they define these workers as "penniless entrepreneurs". Many of these street merchants have lived their whole lives this way, working small jobs and trying to make as much money as possible in the limited free time that they have. Unfortunately, these 'entrepreneurs' accomplish little in terms of making a profit.

Once again, education (or rather a lack of it) furnishes these cycles of poverty. To give a more personal example, my mom and dad were both from the same hometown and both received scholarships to attend universities in America. Many of their old middle school and high school classmates are working the same jobs they worked right out of high school. China has significantly improved its education programs in recent years, which has undoubtedly contributed to the unprecedented development and growth.

Tony Du

Reading Banerjee and Duflo's account of the dofa sellers reminded me of the merchants that litter the streets of poor rural communities in China. My extended family lives in the Sichuan Province of China, and whenever we visit I am always bewildered by the amount of jobs the impoverished juggle in order to make ends meet.

I remember meeting one of my Grandma's close friends in particular. In the mornings, she made noodles and dim sum, selling breakfast foods at her street stand. In the afternoons, she would pick up trash on the streets. At night, she would sell fruits at her stand. The most amazing part was that she was 73 years old and still had the energy to work all day.

This juggling of jobs is incredibly common in rural areas of China. Banerjee and Duflo hit the nail on the head when they define these workers as "penniless entrepreneurs". Many of these street merchants have lived their whole lives this way, working small jobs and trying to make as much money as possible in the limited free time that they have. Unfortunately, these 'entrepreneurs' accomplish little in terms of making a profit.

Once again, education (or rather a lack of it) furnishes these cycles of poverty. To give a more personal example, my mom and dad were both from the same hometown and both received scholarships to attend universities in America. Many of their old middle school and high school classmates are working the same jobs they worked right out of high school. China has significantly improved its education programs in recent years, which has undoubtedly contributed to the unprecedented development and growth.

Walker Tiller

While reading Baanerjee’s and Duflo’s paper on the economic lives of the poor one of the questions that I thought about was the optimal number of children each poor family should have for the best chance to escape poverty or give their children the best opportunity to escape poverty. This idea is complex because for some families it is a liability having numerous children, they add more mouths to feed for the parents, more bodies to clothe, and more education to provide. On the other hand for a family that is in poverty, having more children could be an asset to the family providing additional labor which would allow the family to potentially earn more income.

There must be a point for each family where having an additional child does not provide enough service or benefit to cover the cost of that child until they reach an age that they can be producers in the family and not just consumers. This idea of measuring children as a marginal benefit vs marginal cost seems insensitive but could be vital for a family looking to escape poverty. From my experience it seems that wealthy families tend to have lower numbers of children than impoverished families and I don’t know if this difference is causal or just a correlation.

One other thought in the Marginal Cost/Marginal Benefit analysis for children in poor families is if the sex of the child makes a difference in the cost benefit analysis of having an additional child? This question is not meant to be sexist, but in a family that earns its money from agriculture as many did in the article, it is mostly the boys/men that tend the fields and could be more profitable for the families. Also I realize the parents have no control over which sex the child will be, but it would be interesting to see depending on the families profession if the sex of child makes a difference on future ability to escape poverty.


I previously read this piece prior to my Shepherd international internship as part of the curriculum. It was a very effective reading for me prior to spending the summer in Nicaragua because it reminded me of the challenges the poor face in all aspects of life. I think it easy for people to become so focused on one issue, and forget that poverty is multidimensional. I was able to see most the of the topics mentioned in this piece this summer. The main takeaways from this piece were that while the poor do lead incredibly stressful lives, they are still relatively happy and will rarely complain about the situation. I noticed that while many households did not own the land they lived on, they still cared about their social lives and networks and would often serve me plates of food. I am not too surprised about the money spent on festivities, alcohol and tobacco products based on my LACS 101 class, which talked about the monotonous lifestyles that the poor faced in colonial Spanish America, and that many would turn to alcohol and cultural events to provide excitement and some relief in their lives.

Unfortunately, the statistics on land ownership also did not surprise me. Historically, the laborers have not owned the land they work and today not much have changed around the world. It is crazy to not only compare the earnings of average Americans and those living on less than $2 a day, but to also compare the levels of wealth, since most Americans hold most of their wealth in their homes. I am interested in how the lack of land ownership creates conflicts with neighbors and/or the state. The psychological effects of the lack of security must be quite detrimental.

Thomas Thagard

“The Economic Lives of the Poor” provides its readers with groundbreaking information that destroys the modern assumption of the nutritional poverty cycle in regards to food consumption. Most people’s understanding of third world poverty is the fact that they don’t receive enough calories and thus can’t work hard enough to earn the money for more food. However, Banerjee and Duflo state, “Even the extremely poor do not seem to be as hungry for additional calories as one might expect”. Consequently, this simple analysis that the poor don’t view themselves as extremely hungry explains why they would be more inclined to spend their cash on expendables like tobacco, alcohol, and festivals. Thus, we can begin to establish more effective anti-poverty programs, rather than just throw food at the impoverished. With this information, we begin to understand that the impoverished are simply trying to enjoy their lives due to the uncertainty of tomorrow’s work and food intake. Thus, we can teach the impoverished on ways to utilize both their nutritional and economic resources to their maxim ability.

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